This is a couple of paragraphs which won’t fit in the paper I’m finishing but I think is cool to put it online, and won’t fit in twitter :)


In the last decades, consultants have been taken a more relevant place. In the 1959, there were consultants who designed the mammoth downtown renewal project. Outsourcing to “professionals” is something widely used in the nation, but Vallejo massively uses them. As the ViceMayor said after loosing a close vote against the renovation of the firefighters contracts, “I’m going to say something many here won’t like: The elephant in the room is that the City is run by consultants” (Gomes, 2010)

(…)

In acquiring external knowledge many cities, especially in the US, rely on consultants. The city management of Vallejo, as many others, openly confirmed that they prefer to hire contractors instead of offering city jobs because it is cheaper for the municipality budget. While it is important for cities to obtain knowledge from outside, the case study of Vallejo has shown, that they should be careful not to trust any sole architect, economist, lawyer, arbitrator, planner or academic. Local officials should also contrast information from different groups, which does not necessarily have to be highly paid, or even paid as they can be volunteers concerned about their city or city region.

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Yesterday there was an article about Vallejo in the Financial Times. It says:

For an image of the future that is guaranteed to chill US civic leaders and bondholders alike, there is no better place to look than among the potholed streets and boarded-up houses that litter the Californian city of Vallejo.

It made me feel good that last year I went to the city to make a case study about it. I stated at Univ. of California, Berkeley during the whole Spring semester 2010. A few days ago I finished writing a paper called “VALLEJO, CALIFORNIA. FROM THE FRINGES OF THE CITY, A CASE FOR THE ‘CITY REGION SYSTEM OF SURVIVAL’. I wrote it to present it at the DIME-DRUID ACADEMY Winter Conference 2011, this week.

This paper is very heterodox, and is a paper on progress. The main purpose of it was to make a summary of theories I learned about Local Economic Development at the Berkeley libraries. I then tried to connect the case of this city (or district) of the San Francisco Bay Area, and its significance to entrepreneurship and innovation policy. Innovation from a broad sense, for the ones that now what I’m talking about.

I got much help from the locals of Vallejo, and one of them, the editor of the popular Vallejo Independent Bulletin, asked me to send him a copy of the article when I would finished it. Keeping my word I sent it to him, and he has published it online.

My article at the Vallejo Independent Bulletin

I am grateful he did it, because I got a few comments from the citizens. This made me realize that my ideas are still quite confusing. So I wrote a comment. It seems it has an anti-spam feature, I told the editor. For now I’ll put it here.

Since I read the comments of Ab and SomeoneElse on my paper about Vallejo and the Bay Area, I have been thinking a lot.

I am grateful for the comments. In particular, because I have realized that I have not made a good job to express my ideas. This is hard, as English is not my native language. But also because of the internal fight I have had. I am a PhD student specializing in local economic development, but it is the case of Vallejo that has made me changed many of my preconceptions. Now I would like to comment on the comments.

Ab says: -“the last line is spont on”- and then quotes me: -“Vallejo … end up like many cities in third world countries, where a few (police and firefighters?) live in affluence while the vast majority of citizens live and die in misery”- [police and firefighters added by Ab].

There are two things. First it should be understood that even though Vallejo has been a city, since the 19th century, I refer in the paper as a “district” of the city-region of the Bay Area. I know this may sound weird for any local (of the Bay Area), but coming from abroad I can clearly see that the Bay Area is a large metropolitan area, highly connected in its economic geography.

The second thing is that I don’t necessarily say that police and firefighters are the few, or the elite of Vallejo, nor of course the elite of the city-region. True, they are an interest group, and as I referenced in the paper they have a well known “symbiotic relationship” with the political power of the city. But going back to my first point, one has to look beyond the city limits of Vallejo. Making $150,000 as a safety employee it’s certainly high, but what about the bankers and real estate leaders who make 10 times or more, in the different districts of the Bay Area?. This is probably a stupid comparison, but what about the profits of a company of the city region, like Apple making 100,000 times more. But still, what is their responsibility towards their neighbors?

“Someone Else” points out we need to think outside the box. I’ll try to do it. There is so much anger against the public safety employees, and probably with a reason. But this is not going to solve the problem of Vallejo. Thinking outside the box… What about a Bay Area police? After all, the criminals operate in all the Bay Area, not only in one particular city. I am NOT an expert in safety, but I see that the New York City Police Department, covers 8 million people, more than the 7 million of the Bay Area. The Bay Area has already the BART police, that would fall inside the Bay Area Police. The 9 counties police departments (sheriffs), a heritage from a bygone era could also be reduced. I repeat, I have no idea about this field. But as an economist I would think that cities (and their tax payers) would avoid the “competition” among them. And that is the idea: work more towards collaboration, than competition.

Of course, safety should not be the only thing. In fact should be the least. The most important things would be towards, education. I had the chance to be in UC Berkeley, one of the most amazing universities in the world. Also visited friends in Stanford. Great places. I know all these ideas have been said many times before, even from the former Governor (I still can’t believe people voted for an European actor). But there should be more mechanisms to get more funding for the rest of more ordinary higher education. However, what I think is of really concern, is the high inequality in the school districts across the Bay Area. In Europe we have many problems, don’t get me wrong! but with the exception of a few countries (like UK), every child has the same amount of money allocated for education, regardless in which neighborhood was born. There is an urgent need for a more cohesive education across the Bay Area.

More cohesiveness should be as well for access to justice, healthcare, transportation, innovation and entrepreneurship policy, etc in the Bay Area. That’s what I am trying to say in the paper. Because the different parts of the city region are so interdependent.

The same goes to having X or Y Mayor. Sure, many question if Davis should be the Mayor. But I think it does not matter if X or Y, or Z would be Mayors. Neither if Vallejo hires the best consultants, or the best City Manager. My hypothesis is that it does not matter who is in the leadership of Vallejo. The city will not survive.

Unless, they realize that: 1) Vallejo is dependent of the city-region. (This does not mean surrender). 2) There is need of active coordination, at local (Vallejo) and city-region level. That is stop fighting at local and inter-local level, and start collaborating.

If not, and now I clarify, the city region of San Francisco, will become more and more as third world country, “where a few live in affluence while the vast majority of citizens live and die in misery.”. Many in the elite, as the mentioned Andy Grove in the paper, have noticed it.

“Effective economic development strategies must be customed-designed to meet the unique strengths and opportunities of local and state economies”.

Luke, Ventriss, Reed & Reed argue on page 175, as the editors of the book Managing Economic Development – A guide to State and Local Leadership Strategies (1988). My first impression when I read this, is the striking resemblance of what I must have written a few years ago for a paper conference or project. That is, one should be careful with the ‘one size fits all’ approach than many economists have. I completely agreed with that. That is… agreed. Because now I’m kind of skeptical of this local oriented approach that treats all communities if they were in the same line of the race track.  I keep reasoning in my head:

For example, in the case of Vallejo, they can make the best possible study looking at their financing, regulation, infrastructure, public services, human capital, etc… to tackle their Local Economic Development (as the mentioned book does in chapter 9).  However, no  matter what these cities do, their options will be very limited because theyir economy is quite dependent on the city-region (the San Francisco Bay Area), State of California, etc.

I think to my self that reviewing this book is not going to be very helpful. I keep reading;

“ (…) As a result of the growing economic interdependence, there has been a significant decline in state and local governments’ capacities to unilaterally develop an implement economic development policies and programs. No one government department or individual public manager can effectively act single handedly. This situation forces the invention of new collaborative mechanisms and collective development strategies.
Successful economic development strategies not only precipitate from an intergovernmental contest of cities, counties, COG’s (Council of Governnments), and state and federal agencies, but also emerge from intersectoral collaboration between the public, private, and non profit sectors. Each sector depends on the vitality of the other (…)”

This book is better that I though!, this are so much in line with one of my working papers!. Let’s continue.

“In such an interconnected policy context, a new type of public leadership is required – catalytic leadership. Chapter Eleven examines this trend and shows how, unlike charismatic leadership, which rallies people around the leader’s vision, catalytic leadership facilitates cooperation among a group of leaders and stimulates the pursuit of a goal that is created collectively by the group”.

A pretty nice book, with good complementary articles.

Again, I remembered that one should never judge something for the first paragraphs one reads. Specially from old fellows…

I’m currently in Berkeley, California. Besides the good research environment I have experienced here, I came because of the city of Vallejo. Why Vallejo?

In March 2009 I went to visit our old friends the Tanners, here is Jason’s website. They picked us up in San Francisco and we were driving to his home in Folsom. While driving on I-80, he told me that this city we were driving by (Vallejo), recently declared bankruptcy. He told me it was because of the unions (the police and firefighters), they were getting super high salaries, and the city couldn’t pay them. I was like “come on, you always blame the unions. no matter if it is the car industry or the education system”. We discuss the situation for a while, and then I kept it in mind.

The Doctoral School at my university, Aalborg (Denmark), encourages PhD candidates to study abroad for one semester or so. Something I wanted, was to be able to improve my qualitative research on Local Economic Development. I also wanted to go to a place where I could communicate with any problems (sometimes in Denmark is hard for me), a Spanish speaking country or English place would be fine.  So I looked at a few possibilities in my home country, Spain, England and the U.S. But I was looking for a place somewhat similar to Frederikshavn (see Differences and Similarities between Frederikshavn and Vallejo), with an industrial history, and in the struggle of transform themselves. Besides I had to go to a fine environment research, which is what the Doctoral School wants too. That is to a good university or research center.

Fortunately I knew about Richard Walker at UC Berkeley, from some of his literature, I think his publication with Storper is the number 4 most quoted reference in the discipline of Economic Geography. But specially I knew him from listening to one of his classes on line, [that anyone can follow] or the Berkeley podcast on Economic Geography. It’s an introductory class he teaches to undergrads. Because I also have to do the same, I liked to listen to this classes while I cleaned or cooked at home. I used some of his stuff in my classes. By the way he received the Distinguished Teaching Award this semester too. At the AAG 2009 meeting, I went to thank him for putting his classes online, and the inspiration I got from him. He said I made his day :)  I think he remembered me, so when I asked him if I could visit his Dept. of Geography, he agreed to sponsored me. He’s not an expert on Local Economic Development, but his approach to it is really enriching. I’m really grateful to him, and the whole UC system here. He also has given very good insights for my PhD project and research.

So here I came in late February, and I will leave by the end of July. I like Berkeley, which by the way it’s the institution who gives more PhD degrees in the world. I’ve heard around 800 a year, so here they know how to make PhD’s. have been enjoying visiting a few classes, and I’ve learned a lot from seminars and colloquiums they always have around. The case of Vallejo is amazing, and my family is quite happy to be here visiting Berkeley.

Stay tuned, today Vallejo is the canary in the coal mine.

Today I spent a day in Vallejo, talking to people. So far I have talked to people at the Chamber of Commerce, the Community College, the Historical Museum, Tourist office, journalists, citizens groups, city workers, and many small business owners, and several citizens and people from the Bay Area. I have also talked to police officers and firefighters, although not very formally yet. Besides that, I have had been over a lot of historical material at Berkeley, Vallejo and the internet. Basically I’m trying to understand what has happened there. How Vallejo, with such a fascinating history is now is such a bad situation.

Now I was searching for videos in youtube about the city, and I have found these two, from 2008, right before the city filed for bankruptcy. It’s important to acknowledged that so far is the biggest bankrupt city in California. Hopefully by next year they can solve the situation.


This video is from Glen Beck (for non-Americans reading this, they should know that he’s probably the most influential anti-Obama_government person) This was when the city was about to bankrupt. The video is from Fox News.


In this video the city had already bankrupt, and the Mayor is talking. Is from CNBC.

This third video is from KRON4, a TV covering the San Francisco Bay Area (Vallejo is in its north periphery). They point out the problem being the local police and firefighters. It was 80% of the local budget at that time, I attended to the last City Council and they said it was 74% now. I guess it’s because of the negotiations that the have had.

Today I visited the fire station. The firefighters were kind of skeptical to talk to me. I understand they can be tired to talk to any journalist or researcher nosing around. But the truth of the matter, is that if they don’t openly talk to the people, nobody will know their version. Anyways I think next week they will talk to me.

The purpose of my research is to learn “do and don’t s” we might avoid back in Denmark. I’m also working with another PhD student on the issue, and receive help from my advisor here in Berkeley.

Before I start some qualitative research in the area I have to study the background. I always like to pay special attention to history. In the outstanding libraries here I have found some very interesting material, some of them quite old. I have a pearl to share.

This is from “The prospects of Vallejo; or, Evidences that Vallejo will become a great city. A re-publication of a series of articles first printed in the Vallejo evening chronicle, from March to July 1871.”  It came with a nice map, and when they gave it to me, the librarian told me: “careful, the map is falling apart”.

To put in context, the leaders of Vallejo at the time, were explaining the reasons why Vallejo was going to become a big metropolis, probably among the top 3 cities in California (being at that time the city of San Francisco their main competitor, which even though it had the 25% of the State population and the 50% of its wealth, it seemed to show some weaknesses related to economic geography issues). The articles are actually really good. In such a fashion that I think anyone could be convinced. The main reason they argue was that the train arrived to the city (direct connection from East Coast to West Coast), and that their harbour was starting to take off. During the various articles they mix the best skills of real estate, politicians, academics and marketing fellows.  Their main point was to attract capital for their harbour. Probably these guys had all the investments in their life there.

The interesting thing is the different language. Something that now would not look politically correct. Their thesis all across the articles is: 1) “the intelligent men” look for the most profitable places for their enterprises, 2) They go where they are, and 3) That’s what creates economic development (me paraphrasing).

In the following snippet, (that I think I’m the first to transcribe on the internet) they quote the magnate Horace Greeley, and then they present a rebuttal:

Horace Greeley on San Francisco

At a dinner given in New York on the 13th of October, 1869, to an excursion party of the California Pioneers, Horace Greeley having been called on to respond to the toast of “New York and California,” in the course of his remarks said:

When we speak of the present or the expected greatness of these two remarkable cities, New York and San Francisco, I bet that it will ever be remembered that great cities are the expression of great ideas that they grow out of genius men. Alexander gave his name to the city he formed, and that city bears his name and is memorable to this day. Rome is mighty because of the Senate and people that made her high and proud position – made her the Eternal City; eternal because the genius that created her still lingers over her hills, still is reflected in the sunshine that gleams on her palaces; and thus the shadows of ancient greatness recall to our minds memories and associations that make us nobler that we otherwise would be [Applause.]   If these two cities are to be great, they will be great because of the men who have still the genius to preserve and extend the advantages they have won. Had there been no De Witt Clinton, and had there been no Erie Canal, in vain would have been the central position and commercial advantages of this city. She was not the first city of America until her great men gave artificial extension and development to those advantages, and thereby fixed on her, I think, for centuries, certainly for the present age, the honored advantages of being the emporium of the Western World. If she is to maintain this position, she will do it because she will do it because she will have great men continually able to keep her in advance. As she has seized the canal, telegraph and railroad, and pressed them into her service, so she must be ready, as new inventions are presented, to seize them and turn them to her advantage. As it is with New York so will it be with San Francisco. Les us not believe that because this city has quadrupled in population in the last half century that it is in the order of things and must continue. She will maintain her position, for her great men have the power to plan new enterprises, and her great financiers shall second those efforts, and continue to keep her at the head of the commercial world. So with San Francisco. The great railroad recently achieved would never have been if there had not been men in that city who saw capacities and perceived opportunities and possibilities which the multitude did not see.

Mr. Greeley is wrong in supposing that the construction of the railroad is due to San Francisco; he is wrong in supposing that the danger to which that city is exposed (he refers to it, evidently, though he does not mention it,) could be averted by the genius of the business men; and he is wrong again in assuming that genius makes cities. It is the good site that attracts and rewards genius, and stimulates enterprise.

I’m looking at these two cities areas. Frederishavn is a small city of roughly 25,000 inhabitants in North Denmark, with some dependent towns around. Vallejo it’s a city in California 4 times bigger than the Danish one.

For several reasons that I will lay out, I think Frederikshavn has some interesting lessons to learn from Vallejo. Perhaps, it can also be the other way around.

I’m not really doing a comparative study. However I’m going to say some of the differences and similarities between these two places. (See a map of the two)

Differences

  1. Vallejo is considered by some, part of the San Francisco Bay Area. So it’s geographically close to a population of 7 million people.
  2. It’s in the United States, and it’s regulated with its Federal (national) and State (California) laws.
  3. American socieconomic characteristics.
  4. Historical traits of U.S. western city (with booms and busts).
  5. Very diverse population. Frederikshavn has a less than 5% of its population non-white, Vallejo has only 1/3 of its population white, the rest is quite mixed (1/4 Asian,  1/4 African-American, and the rest from different races. Hispanic are 15% aprox.)
  6. Vallejo has a very nice weather :)

Similarities that Vallejo has with Frederikshavn:

  1. Blue-collar town (with all that this implies)
  2. Train got there at the same time (1869 in Vallejo and 1871 Frh.) by the end of railways boom.
  3. Its coast and train arrival are the two most important factor to explain the existence and development of both.
  4. Industrial oriented during all 20th century
  5. Shipyards highest employer during mid 20th century (In Vallejo were mostly military)
  6. Shipyards closed in the 90’s
  7. Traditionally military “Navy town” (Base closed in 1996 in Vallejo)
  8. It can be considered in the “periphery” of innovative regions, supplying people there
  9. ‘Little brother syndrome’ compared to relatively close bigger cities
  10. Even though they’re not a rich town, they have a decent living standard on average
  11. Important recent political changes (political tension).
  12. Recent change of Mayor (2008-09)
  13. Strong emphasis in ‘experience economy’ (recreation, tourism, culture, etc.)
  14. Town in the middle on the way of bigger city-regions (“strategic” geographical position)
  15. Strong focus on fostering entrepreneurship, with partial success
  16. Powerful unions
  17. Regarded as a lesser city by the bigger cities
  18. Education scores are lower than average
  19. A high number of young people leave
  20. Relative violent reputation
  21. There is a small marina
  22. There is a ferry service
  23. Crucial building projects have not started because of lack of funds
  24. Current higher unemployment than average
  25. Recent serious economic troubles
  26. A few groups of very active citizens
  27. They are the poorest rich (The Bay Areas as well as Denmark are very rich places compared to the rest of the world).

I have been updating this post. The more I have studied Vallejo, the more I found similarities.